The Intercept reports on several news media who are selling special services at the national political conventions — meetings, cocktail parties, and more. The services are corrosive. Some are explicitly corrupt, “…they make explicit the inevitable failure of the distinction between “paid” and “earned” content.”making explicit the inevitable failure of the distinction between “paid” and “earned” content.

The less controversial services are corrosive because they let the media take money from the people they cover. Having spent a few decades as a marketing communications guy, I can promise you that in every business considering these offers, the conversation includes someone saying, “It doesn’t matter if no one comes to the cocktail party. It’d still improve our relationship with the publication.” Why? Because it’s a way to pay the journal money. That’s corrosive.

Larry Lessig points out that it’s not much different from news organizations tuning their coverage to their ratings. But such tuning at least caters to perceived piopular interest. These new services let an organization or candidate buy coverage despite a decided lack of public interest. It is worse than buying ads because the news media have traditionally had a “Chinese wall” between the advertising and editorial departments. This has been a fairly effective way of protecting editorial content from the direct influence of the marketing needs of the journal, even though the wall is sometimes breached, and Time Magazine has shamefully torn it down.

Once the media started letting companies pay for phony news coverage, they pretended to honor the breach by distinguishing “earned” and “paid” content. “Earned content” is coverage provided by media of events they think are newsworthy. “Paid content” is, well, paid content. Non-sleazebag companies and their PR reps expect media to mark paid content as paid for. Edelman, the world’s largest independent PR company, created ethical guidelines that not only say that the paid content must be well marked, but that Edelman will have its own Chinese wall between the processes by which earned content is pitched (“Yo, I have a client who’s invented a time travel machine. Wanna an interview? How’s yesterday for you?”) and the negotiations that result in the placement of paid content. (Disclosure: I had a tiny hand — Trump-sized — in drafting those guidelines.)

That’s better than nothing, but paid content still makes me queasy. Companies are willing to pay for content precisely because it looks like real coverage and thus tends to be taken more seriously than obvious ads. This erodes the phenomenological line between news and ads, which is bad for democracy and culture. Indeed, “the point of paid content is to erode the line. ”the point of paid content is to erode the line.

But letting candidates pay for interviews takes this to a whole new level. This is what The Intercept says:

Sponsors who pay $200,000 are promised convention interviews with The Hill’s editorial staff for “up to three named executives or organization representatives of your choice,” according to a brochure obtained by The Intercept. “These interviews are pieces of earned media,” the brochure says, “and will be hosted on a dedicated page on thehill.com and promoted across The Hill’s digital and social media channels.”

The Hill says the resulting interviews will be earned media. Suppose the interview is stupid, boring, self-serving and non-newsworthy? If it weren’t, the client wouldn’t be paying for it. But The Hill is promising it’s going to run anyway because the client paid them $200,000. That is the very definition of paid content. So, by calling it “earned content,” The Hill can only mean that the article will not be marked as paid content, even though that is precisely what it is.

This corrupts the already corrosive practice of accepting paid content. It is disgraceful.

No, it is not. (Of course, talking about the illegal sharing of music as “piracy” is ridiculous, as would be obvious to anyone who’s ever met an actual, non-arrrrr pirate. Which I have not.)

Is turning a page in a magazine without reading the ad piracy? Is going to pee during a commercial piracy? Is keeping your eyes on the road instead of looking at the billboards piracy? Is it piracy when a TV show blurs the name of a product on the tee shirt of a passerby?

Nope.

There’s only one difference between those acts of non-piracy and what happens when you run an ad blocker such as AdBlock Plus in your browser. When you turn the page on a magazine ad or fix yourself a big bowl of Soylent during a TV commercial, the magazine publishers and the TV station don’t know about it. That’s the only relevant difference. Whether the provider of the ad knows about it or not is not relevant to whether it’s piracy.

It is, of course, relevant to whether the Web page gets paid for the ad. So the suggestion that we turn our ad blockers off to support the content that we appreciate — which on particular pages I in fact do — amounts to urging readers to conspire with websites to pretend that we’re reading the ads, wink wink, so that the website can get its cut…for delivering no value to the advertisers.

A business model based on a conspiracy to maintain a delusion is itself delusional.

In fact, as Doc Searls points out, it’s a delusion based on a falsehood: the belief that we are always shopping. We’re not, even though advertisers would like us to be always-on “consumers.”

And, by the way, here’s a related delusion: The idea that popup ads that obscure the content we’ve come to see are worth the ill-will they generate. That delusion depends upon ignoring the scientifically calculated FYR: the ratio of the Fuck You’s muttered by the recipients of these attentional muggings versus their intentional click-throughs.

Zeynep, who has written with wisdom and insight on the role of social media in the Turkish protests (e.g., here and here), looks at how Twitter brought the Ferguson police riots onto the national agenda and how well Twitter “covered” them. But those events didn’t make a dent in Facebook’s presentation of news. Why? she asks.

Twitter is an open platform where anyone can post whatever they want. It therefore reflects our interests — although no medium is a mere reflection. FB, on the other hand, uses algorithms to determine what it thinks our interests are … except that its algorithms are actually tuned to get us to click more so that FB can show us more ads. (Zeynep made that point about an early and errant draft of my CNN.com commentary on the FB mood experiment. Thanks, Zeynep!) She uses this to make an important point about the Net’s value as a medium the agenda of which is not set by commercial interests. She talks about this as “Net Neutrality,” extending it from its usual application to the access providers (Comcast, Verizon and their small handful of buddies) to those providing important platforms such as Facebook.

She concludes (but please read it all!):

How the internet is run, governed and filtered is a human rights issue.

And despite a lot of dismal developments, this fight is far from over, and its enemy is cynicism and dismissal of this reality.

Don’t let anyone tell you otherwise.

What happens to #Ferguson affects what happens to Ferguson.

Yup yup yup. This post is required reading for all of the cynics who would impress us with their wake-up-and-smell-the-shitty-coffee pessimism.

Ethan on Ads

Ethan cites a talk by Maciej Ceglowski for the insight that “we’ve ended up with surveillance as the default, if not sole, internet business model.” Says Ethan,

I have come to believe that advertising is the original sin of the web. The fallen state of our Internet is a direct, if unintentional, consequence of choosing advertising as the default model to support online content and services.

Since Internet ads are more effective as a business model than as an actual business, companies are driven ever more frantically to gather customer data in order to hold out the hope of making their ads more effective. And there went out privacy. (This is a very rough paraphrase of Ethan’s argument.)

Ethan pays more than lip service to the benefits — promised and delivered — of the ad-supported Web. But he points to four rather devastating drawbacks, include the distortions caused by algorithmic filtering that Zeynep warns us about. Then he discusses what we can do about it.

I’m not going to try to summarize any further. You need to read this piece. And you will enjoy it. For example, betcha can’t guess who wrote the code for the world’s first pop-up ads. Answer: Ethan .

Also recommended: Jeff Jarvis’ response and Mathew Ingram’s response to both. I myself have little hope that advertising can be made significantly better, where “better” means being unreservedly in the interests of “consumers” and sufficiently valuable to the advertisers. I’m of course not confident about this, and maybe tomorrow someone will come up with the solution, but my thinking is based on the assumption that the open Web is always going to be a better way for us to discover what we care about because the native building material of the Web is in fact what we find mutually interesting.

Conclusion:

Read both these articles. They are important contributions to understanding the Web We Want.

I’m a sucker for ads that comment on the dishonesty of ads. For example, I laughed at this one from Newcastle Brown Ale:

I also really liked this one as well:

I do have a duck-rabbit disagreement with Piper Hoffman’s reading of it at BlogHer. I took the ad as a direct comment on the sexism of beer ads: if you’re not an attractive woman, beer companies won’t include you. But Piper raises an interesting point. [SPOILER ALERT] She’s right that if the pronoun had been “she,” the point would have been less ambiguous. But it also would have been a bit crueler, since the ad would have had Newcastle calling their brewmistress unattractive, and it also could have been taken as Newcastle agreeing that only attractive women should ever be shown on in an ad.

While I enjoy a meta-ad like this (at least as I take it), I also feel a bit meta-fooled: What does that have to do with whether their beer is any good? I’m not looking to be friends with a beer.

I get more enjoyment from viewers subverting ads. For example, I saw an ad for KFC about some new boneless chicken product.

I wasn’t paying attention, in part because it was a commercial, and in part because I haven’t eaten anything from KFC since I became a vegetarian 1979 but I have not forgotten the sensation of eating chicken that’s been so close to liquefied that it’s held together only by a layer of deep-fried cholesterol. But I saw the hashtag #iAteTheBones and checked it out on Twitter.

Bunches of the tweets praise the commercial as amusing. (It was directed by David O.Russell, who also directed the Oscar-winning Silver Linings Playbook.) But prominent in the list is this:

Andres Hervas-Drane Begins by noting the long tail in the market share of products. There’s empirical evidence that this is happening online. Why there? Standard answer: Supply side. But he wants to look at factors on the demand side that can affect this distribution.

He sets up a case where consumers have difference preferences and come to the market uninformed. In the offline world, search happens through word of mouth. They can search with evaluations or with recommendations. Recommendations come from consumers who searched with evaluations. Word of mouth results in a high concentration of sales.

Almost a third of Amazon’s sales are generated by recommendations. These are generated by users as meta-content, finding consumers who have similar preferences. This is taste-matching and it reduces sales concentration.

Then there are “artistic markets”: that increase the demand for niche producers and results in long term cultural variety.

Peyman Faratin talks about a case study of prediction markets. His main point: Scarcity is at play even in the UGC system. The new scarcity is of attention.

An incentive engineering problem is at foot in prediction markets. When you can’t bet real money, the incentives go down. The reward streams are delayed. You have to search for the market. There are significant transaction costs [which he goes over in some detail, but too hard to capture briefly…sorry]. That’s why prediction markets aren’t going very well; they’re lonely.

Solution: Reward the big hitters. Let them transfer their reputations. Give them content management rights. Rank markets and reputations. “Invisible hand of the algorithm: Recommendations.” Use widgets to let the market come to the user. [I missed the end of this. Sorry!]

Chris Derllarocas talksabout “Your Operations hvae become your New Marketing.” “Every customer is a potential brand ambassador or a lethal bran assassin.” E.g., in 2006, Comcast spent $100 M in advertising, wiped out by the youtube of a sleeping technician. UGC can make or break your business.

Most influential UGC occurs spontaneously and represents non-representative experiences. Companies need to take preventive measures. Consumers use UGC to decide if they should consume a product. Once they have, they decide what to report. Companies need to “Strategically re-engineer the consumption experience to spontaneously provoke the right mix of consumer content.”

Rules: Pay attention to extreme events. Move towards a culture that pays attention to outliers, positive and negative. “Redesign your monitoring practices and career incentives to accentuate the positive and eliminate the negative.” Also, “reasses yesterday’s yield management practices.” That is, make sure you do not systematically produce a small number of unhappy customers” (e.g., but routinely overbooking, or by routinely selling undesirable hotel rooms at very low rates). Also, get to know your power customers, i.e., the ones more likely to be vocal. They should receive “the special teratment that loyal big spenders used to receive ten years ago.” Also, not sock puppetry. Also, maybe have a Chief Perception Officer.

Q: You’re proposing an operational hit since we won’t be selling all the seats or rooms.
A: Yes. That’s the decision to be made. We need to make these decisions holistically. We don’t have the complete answer, There’s room for innovation.

Q: [me] This morning we heard that the population is not nearly as adept at using these tools as some of us (= me) would like to believe. This afternoon we hear about markets that are adept. How did you hear this morning’s research?
A: It varies by market. And consumers aren’t necessarily savvy. The UGC has effect even when they’re not savvy. You need to tier your efforts, taking account of the consumers’ Web savviness.

Q: How’s it work in other countries?
A: We haven’t done that research. Happy collaborate…

Q: How does this apply to B2B?
A: More limited.

Anindya Ghose will talk about combining textmining with econometrics. Firms want to know if there’s any economic value to social networks and UGC. How can they monetize UGC?

Hypothesis: The increasing availability of UGC is reflected in sponsored search metrics. And, yes, he found a correlation between the frequency with which key words are used in blogs and their cost-per-click on search sites. He’s researching whether there’s some sort of causal effect, but it’s not an easy problem. Hence, UGC can be monetized through sponsored search.

Advertisers are reluctant to jump in, Scott says. They worry about brand. UGC video is cheap and plentifu. but it’s not selling. The CPMs are deeply discounted. Ad revenues are not going to UGC and marketing execs are pessimistic about this; only 22% think UGC is a “high-growth opportunity.” 73% of advertisers say they definitely will not run ads on UGC.

So, what are the other models? You can incorporate UGC on a site as a “retention device.” [CNN’s turn-the-channel “iReports”?] Authentication fees on microblogging sites? E.g., Twitter charges DominosPizza to assure that it in fact represents Dominos Pizza. How about sponsorships on crowdsourcing sites such as Digg? E.g., at Reddit, maybe a sponsor could be an “amplifier” that announces that each thumbs up counts 5x. [Wha??? Wouldn’t that destroy Reddit’s credibility?] Finally, there’s cross-platform marketing. Only 10% of visitors to a mag’s site are subscribers. So, cannibalization isn’t a worry. But how do you make money on the web site? Ads only work for very big sites. But,” online subscriptions sales are sweet.” People who subscribe that way have higher value than subscribers through other means: They’ve sought out the mag, they pay with a credit card, they are more likely to take an automatic renewal contract, they get added to the email list, etc.

He points to Conde Nast examples of UGC. Contests for designs, NYer caption contest, GQ tips on good grooming. [These are as much UGC as a man-in-the-street interview.]

He points to Reddit, a CN site. He acknowledges the bad language on the page. It produces no subscription revenues. They’re starting to have sponsored posts that still can be voted up or down.

Q: Are people dropping subscriptions because they can get the content for free online?
Scott: In general, no. The conditions for reading mags are special, e.g., reading one on the subway to create zone of privacy. [A good e-reader will destroy this.] For news mags, that’s more of an issue.